NVR builds and sells single-family homes and condominiums in the
eastern and southern United States under a variety of names,
including Ryan Homes, NVHomes, Fox Ridge Homes, and Rymarc Homes.
Its primary market is first-time home buyers and a category known
as "first-time move-up" buyers.
Over a 52-week period ending in October 2009, its share price
increased from a low of $310 to a high of $698. But that upward
trend is recent news. In 2005, before the steep decline in the
housing market, NVR was one of the 10 largest homebuilders in the
country, building and selling hundreds of homes a month.
With that kind of volume, the biggest challenge was to be able to
identify and fix quality issues in real time. They needed to spot
problems with processes and skill gaps in their personnel that were
critical to quality and to fix them right away.
Jim Caprara, then vice president of learning at NVR, looked for a
non-traditional way to link the learning function to this key
business challenge. "We wanted to create a solution that was fast
and efficient and that made sense for NVR. Our solution was to
shift NVR's customer service function into the learning
organization," he says.
By monitoring all of the customer call activity and managing the
company's customer satisfaction surveys, the learning function was
able to identify valuable opportunities for improving products and
services. They could identify and target specific development needs
for field managers, salespeople, and production employees. And they
could monitor and measure the results of their development through
the learning function's field training organization.
Merging customer service into the learning organization
dramatically accelerated the speed with which the company could
identify and respond to problems. That nontraditional approach
clearly improved the readiness of the organization to perform. And
there was customer satisfaction data to prove it.
By 2006, the homebuilding market was approaching the start of a
historic downturn in sales brought on by the failure of mortgage
banks and other lending institutions. But the shaky housing market
gave Caprara's team another opportunity to demonstrate the power of
talent management as a business tool.
"Even then, well before the crash, we knew the housing market was
weakening. That gave the learning organization the chance to do
some predictive forecasting of business performance," explains
Caprara. Using two measures of success for salespeople, they were
able to predict with great accuracy the impact of the downturn well
before it hit. This allowed the company to take clear preventive
The learning organization used two measures of salespeople's
readiness to perform: skills retention and skills utilization. They
conducted proctored tests of the entire NVR salesforce. Salespeople
and their managers were tested to determine how much of their
skills training they had retained.
The learning organization was then able to target and deliver
specific skills training that the sales teams needed to be ready to
meet the challenges that were headed toward the company.
"Understanding the company's level of skills retention brought us
half way there," says Caprara. Using NVR's sales training staff in
the field, they began to test how many of those sales skills were
being used. Within two weeks they conducted more than 180 "secret
shopping" experiences using the same script in every location and
videotaping each session. They were looking for utilization of the
skills uncovered in the previous study of retention.
In other words, how many of the skills that salespeople retained
were they actually using? The results showed that in areas such as
Maryland and Washington, D.C. - where the housing market was still
strong - salespeople were not using sophisticated skills to close
their sales. In the weaker markets, by contrast, NVR salespeople
had to call on many more of the skills on which they'd been
The diagnostic procedures used to analyze the data from the secret
shopping experiences revealed the specific strengths and weaknesses
of the salesforce for the whole company, division by division. That
information gave the learning organization even more ability to
target the readiness of the salesforce for the coming downturn. The
results yielded clear predictions of sales performance if the
housing market continued to shift downward.
Several of the sales teams with the highest performance histories
were identified to be at risk. They had never had to use the skills
required in a tough market. This was a shock to management. The
study also revealed that many of the company's lowest performing
sales teams were better equipped for challenging conditions because
they were actively using the skills that a bad market requires.
By early 2007 when housing sales everywhere began to fall, NVR's
learning organization had already accurately predicted the
strengths and weaknesses in the sales organization's skills, and
learning programs were already in place to improve readiness to
perform. Tests and control groups and additional secret shopping
for the next 12 months showed significant improvements in the
Caprara labeled his team's actions preemptive talent management.
"If we had waited for a skills training need to emerge as housing
sales went down, the results for NVR would have been catastrophic,"
he says. As events unfolded, NVR was one of only a few large
homebuilding companies in a position to make a strong recovery as
the market began to improve in July 2009.
This case study was excerpted from the ASTD white paper, "Bridging
the Skills Gap," published in December 2009. Click for more information about